Australian fintech landscape shrinks, blockchain, crypto hits 14%.
More than 7% of fintech companies headquartered in Australia will close by 2024, with the blockchain and cryptocurrency market the biggest beneficiaries, according to KPMG's Fintech Landscape of the Country survey.
The number of independent fintech companies in Australia has fallen for two years, from 800 companies in 2022 to 767 across all business verticals on December 9, according to KPMG's Australia Fintech Landscape 2024 report.
Firms from the blockchain and crypto industry will represent 14% of the top 60 Australian fintech companies in 2024. The report said:
“The blockchain and cryptocurrency space was the hardest hit in Australia's fintech landscape, with 74 active companies down 14% by 2024.
Australian crypto companies have the biggest gains in 2024
According to KPMG, 4.5% of the 60 firms went out of business, while 3% closed due to mergers and acquisitions (M&A). Most M&A deals were driven by strategic interests, with buyers looking to enhance specific capabilities.
Australia's fintech 2024 summary table. Source: KPMG
The KPMG report also attributed the decline of blockchain and crypto companies to growing interest in artificial intelligence. Still, recent pro-crypto events, such as the approval of spot Bitcoin (BTC) exchange-traded funds in the United States, could change the trend by 2025, KPMG said.
Growing demand for alternative investments, supported by US rate cuts in the coming months, could further fuel the creation of new crypto and blockchain companies in the coming year.
Giving to crypto firms encourages iron-fisted treatment.
On December 4, the Australian Securities and Investments Commission (ASIC) released a consultation paper proposing a blanket financial licensing system for most crypto firms in Australia.
Source: ASIC
Related: Australia begins consultation on OECD crypto reporting framework
Two days later, on December 6, Australia's national financial intelligence agency – the Australian Transaction Reports and Analysis Center (AUSTRAC) – announced plans to focus on the cryptocurrency industry by 2025. Australian CEO Brendan Thomas says crypto ATMs are an attractive way to cash. Washing:
“This is the first step in AUSTRAC's focus on reducing cryptocurrency crime in Australia. We will focus on this industry next year.”
Crypto ATM operators in Australia are required to register with AUSTRAC, conduct transaction controls and implement Know Your Customer (KYC) background checks on users.
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